EUR/USD long term analysis. Take a look at where all the bears are hidden and where the bulls are waiting.
Last time I analyzed EUR/USD in January 2019. Maybe that’s strange, but if you take a look at that analysis, you will realize why. Very rarely, or better to say almost never in the last year and a half I traded the major currency pair. I sow then how this could become the most boring pair to follow, to analyse and to trade with short term. Even that I have predicted exactly a long term down trend, after I hitted 1.2500 target exactly, the EUR/USD simply wasn’t interested to me at all. As the FED started again with monetary policy easing during 2019 for two times and the ECB continued with the same actions which has started in 2018, I sow how the short term range could become too tight for me. Sure, my prediction which I have made in January 2019 for a possible 1.00 target for that year didn’t came true as the previous mentioned FED actions “ruined the move”. I didn’t expect a rate cuts in 2019, but I wasn’t wrong at the end. The pair was bearish since and how boring it was, you can see in 2019 range. The EUR/USD opened the year 2019 at 1.1462 and closed the same at 1.1209! A whole 250 pips. Was I right not to analyse any more after January!? Sure, the bearish trend has lead the pair all the way to the low at 1.0880, after which the FED actions (August 01. and September 18.) boosted the Eur back up. Ok, but where are we now in 2020 and what could happen next?
The EUR/USD opened 2020 at 1.1211 and in the beginning of May the price is currently at 1.1000. The Covid 19 situation disrupted everything in March and the range was almost a 1000 pips in that month, closing the same exactly at the opening level of 1.1035. At first at the end of February, beginning of March the EUR went strongly up for two weeks reaching 1.1494 and then the USD has a strong comeback down in the next two weeks with low at the 1.0637, where the Eur bulls has taken over again and boosted the pair back in the middle, one week up, seconf again down and here we are, in the middle of nowere again. 🙂
Well, it’s not strange as the Central Banks has a coordinated actions in March, fighting the Covid 19 economic breakdown with everything they have. So what now?
Huh, it’s easy to see how the USD has a bigger advantage technically as the pair formed a huge “descending triangle” on monthy chart. It’s not easy to break this strong down trend line on the way up, on the other hand the Bulls are holding 1.0650/1.0750 level. There are several possibilities from here, at first toward 1.00, but also there is a possibility of staying neutral or even slightly higer, where the strong bears are waiting. As the both, the ECB and the FED are boosting their economys strongly with monetary policy easings, this could become a clear technical fight in between bears and bulls. Fundamentaly, there is no advantage in this moment.
That’s how I pointed all the important technical levels on both ways, with possible developments when and if the pair reached certain levels. As I already wrote, the algos will lead the way based on this that’s for sure. How do you see it, please do share your view with us here.